Netflix Refines Its Conversion Funnel

A lot of people have been linking to this Wired story about “The Defenders” and how Netflix is using it as a way to gauge the effectiveness of various recommendation paths to the show. You know, those thumbnails at the bottom of your screen or other prompts that offer suggestions on what you might enjoy next.

That’s really interesting and there are some fascinating details in there about how Netflix segments the audience and uses the data it gathers about your viewing habits to tailor all manner of recommendations. One thought jumped out at me as I was reading it, though:

This is just conversion path optimization.

Spend any amount of time dealing with online marketing and you’ll encounter a situation where you need to define the ideal conversion path for your customer. That path needs to be defined but then measured, analyzed and tested to see where customers might be falling off. Whether you’re dealing with email, social media or anything else online, a purchase or other conversion is the goal of at least some percentage of your program.

That’s exactly what’s going on here. The difference is that Netflix already knows a lot about you and is able to customize the path to what it feels to be your preferences. Most conversion campaigns will have some of that data but not nearly to the granular, everyday usage level that Netflix does.

This kind of customization, considering it’s coming from an entertainment company like Netflix, has the potential to greatly influence the tastes and preferences of a vast swath of society. It basically decides what tastes or preferences to reinforce and which to ignore, making the decision for the viewer, who doesn’t have to put much effort into the process beyond clicking a button.

If that sounds like a feedback loop, you’re not wholly wrong. Netflix will continue to spend cash on original series and movies based on data showing what its customers want, refining that production process based on results. A recent study made a lot of headlines claiming young people haven’t watched many classic films, particularly those made before the 1970s. That just happens to coincide closely with Netflix’s catalog of films, which only sports a couple dozen black and white features.

What Netflix is doing with “The Defenders” isn’t all that different from the A/B testing any other company does, giving different audience segments different experiences to see which works best. It’s just that Netflix has a lot more data to work with – just as Facebook does when determining which posts and ads to display – and the ability to even more finely personalize that experience over time.

Chris Thilk is a freelance writer and content strategist who lives in the Chicago suburbs.